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LBMA Industry Poll: $1843 Gold Target by September

Release Date: 
Tuesday, November 13, 2012

The euro fell to two-month lows as uncertainty about a bailout payment for Greece grew; however, gold was effectively unchanged despite the stronger dollar.  Gold was $.40 higher at 7:57 a.m. Pacific Time on the New York Spot Market, trading at $1,732 per ounce.  Spot silver was $.21 lower, trading at $32.73 per ounce.  (Click here for the most current spot prices.)

Participants polled at the annual London Bullion Metal Association conference on Tuesday believe gold could reach $1,843 per ounce by September 2013, with silver predicted to rise to $38.40 per ounce.  The conference included analysts, bankers, miners, refiners and jewelers.  The projected rise of 6.7 percent in the price of gold is based on expectations for growing demand in Asia, particularly China, along with a continuation of easy monetary policy in the U.S.  More than half of those polled expect the Fed to launch another round of quantitative easing.

“Having found support and stabilized above 1700, a move above 1740 should now open the way back towards important resistance at 1800,” said analyst Ole Hansen at Saxo Bank. “We believe the direction of least resistance over the coming weeks will be to the upside.”

Gold got the best possible result out of the U.S. election, said UBS strategist Edel Tully.  With a divided Congress, there is a high likelihood of political gridlock with both the fiscal cliff and the debt ceiling now in focus, which could yield potential upside opportunities for gold.

“The uncertainty surrounding the election was gold’s biggest obstacle in recent weeks and the reason why speculators have exited for four consecutive weeks,” Tully said. “Now that road block is removed, gold investors can re-focus with more clarity and pre-position themselves ahead of the important event risks up ahead, not just of a fiscal nature but also monetary policy…All in all, gold could not have asked for a better outcome. Now it’s up to buyers to step up to the plate.”

(Sources:  “Gold may be on track to test $1800 again: Saxo Bank,” Commodity Online, November 13, 2012; “LBMA meet forecasts gold at $1,843/oz by next Sept. -poll,” Reuters, November 13, 2012; “Gold couldn’t have asked for a better election outcome – UBS,” Financial Post, November 7, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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